Act 188 of 1982 – Part 2

Act 188 of 1982 – Part 2

 

To understand what PASSHE students and the PASSHE universities are facing, it may be helpful to consider three different aspects of Act 188: 1) The positive, student-centered aspects of the law; 2) Certain legal requirements in the law which, at times over the past 30 years, the PASSHE Board of Governors has chosen to ignore—so far without consequence, and 3) Some greatly needed provisions in the law that: a) never made it into the final draft of Act 188, as approved and amended over the years, and b) whose absence has contributed to the continuing failure of PASSHE to deliver on the statutory purpose of Act 188: “High quality education at the lowest possible cost to the students.”

 

Examples of Item 1) were presented in a previous blog post entitled “Act 188 of 1982.”

 

Examples of Item 2) were described in two previous blog posts:  How Public Universities are Governed; and, Conflict of Interest Part 3.       

A major example of Item 3—greatly needed legal provisions that never made it into the final language of Act 188—is the fact that PASSHE has operated for 30 years without independent legal counsel, even though the State has been the minority financial stakeholder for 20 of the past 30 years!

As we will see, the absence of independent legal counsel has enabled major conflicts of interest to exist, distort and, in some cases, defeat both the spirit and letter of Act 188 of 1982, as enacted.

The Lack of Independent Legal Counsel for PASSHE

During FY 1983 which began on July 1, 1983—the same day that Act 188 took effect—PASSHE  received 63% of its annual operating funding from the State in the form of “state appropriation,” with student tuition and fees providing the balance of 37%.

At that time, the State was the majority financial stakeholder in PASSHE and, for that reason alone, the fledgling state system of 14 universities then known as “SSHE” (pronounced “She-He”) was not granted independent legal counsel at that time since, at 63% funding, it was still very much a state agency.

In fact, Act 188 makes no mention of how PASSHE would receive its legal representation, and no such mention was needed since an earlier law, the Commonwealth Attorney’s Act of 1980, had already cited SSHE on its long list of Commonwealth agencies to be “represented” by the Office of General Counsel (OGC), the legal office that represents the Governor and thirty-three (33) other State agencies. 

That list does not include Pennsylvania’s four (4) “state-related” universities, even though they receive somewhat more State funding than PASSHE receives.  The difference in funding, however, is roughly proportional to the respective numbers of students served by the two types of “public” universities. 

In terms of full-time-equivalent (FTE) students, for example, PASSHE’s 14 universities serve 112,000 FTE students, while the four state-related universities serve 148,000 FTE students, 32% more than PASSHE. 

The State appropriation figures for 1983 are these, PASSHE: $235 million; State-Related: $327 million, or 39% more.  In 2013, PASSHE received $413 million; the State-Related: $515 million, or 25% more.

Taken together—the fact that the state-related universities retain independent legal counsel, and the fact that they also select the majority (two thirds) of their governing board members—these two facts are critical to their ability to control their own destinies, even while receiving substantial State subsidies.

Recall that both types of “public” universities in Pennsylvania are being privatized without a plan.  The “state related” universities now receive something less than 20% of their funding from the State, while the “state-owned” universities now receive something more than 20% of their funding from the State.

In other words, the state-related universities are already more than 80% private, and the PASSHE universities are already more than 70% private—a very slight difference in degree of “private-ness.” 

Yet, taken together—the fact that the state-owned universities do not retain independent legal counsel, and the fact that they don’t select any of their governing board members—these two facts condemn the PASSHE universities to privatization without representation, which is just another name for tyranny.

As just one example of the problem, PASSHE’s lack of independent legal counsel has resulted in a key legal opinion that says, in effect, that “private dollars,” from the personal checkbooks of students and parents paying tuition, suddenly become “State dollars” the instant their checks are deposited into PASSHE university accounts.

By such tortured logic, might not a thief argue that his ill-gotten gains suddenly became legally his once deposited into his bank account?